DomainTools Blog

Buying and Selling Domains – Advice from the Experts
One of the workshop sessions on Day 2 of Domainfest featured a panel of experts who talked about the best tips and strategies for buying and selling domains. The panel included Michael Berkens, Larry Fischer, Tessa Holcomb, Jason Miner, and Kathy Nielsen. Whether you’re a domain investor, buyer or domains are part of your job description, the session was very informative.

Predictions for the Domain Market in 2011

Among the panel, the first prediction for the domain market in 2011 was that it will continue to grow with new players looking at domains for acquisition, monitization or brand building purposes. The second prediction was that the largest domain sale will likely happen this year, perhaps in the $20-$30 million dollar range.

Here are highlights of some of the best advice they had to share about buying and selling domains:

Selling Domains…

• Keep your Whois information accurate! Buyers are leveraging Whois, and by keeping your contact information accurate, you’ll help maximize your sales (There was a nice shout out to DomainTools.com when the panel spoke about Whois information and the best way to find it!). When buying a domain from someone you may not know or trust, make sure you protect yourself by researching the domain’s history. There are many websites that offer basic Whois lookup information, but DomainTools.com offers extensive historical information including Whois, IP Address (web hosting), Name Server, Registrar and Thumbnail History to help provide a complete view of a domain’s life cycle. Be sure to leverage DomainTools’ Whois for basic DNS checks.
• Provide a Ballpark Selling Price. If you want to sell your domain, the experts recommend starting with a buy it now price or at least start with some type of price point. This is more attractive for small and medium businesses in particular who are looking for a negotiation starting point and it also gives them a stronger sense of trust. If you simply have a ‘make an offer’ option, it may be more intimidating for those smaller and medium sized businesses to take the first step and approach you.
• Get your Domain in Front of Multiple Outlets. It’s strategic to extend your distribution points (again, make sure your Whois information is updated).
• For Larger Domain Sales, Go with an Escrow Company and Draw Up a Contract. These services protect both the buyer and seller. Escrow.com is an escrow company to look into, and you might also seek the guidance of a domain lawyer.
• Negotiating a Sale? It’s All About Speed to Market. As a seller, be sure to name your price, provide a link at the top of your domain’s page, and be quick to respond to parties of interest since many buyers are simultaneously looking into other opportunities.

Buying Domains…

• Do your Research and Investigate What’s Going On with Keywords and Extensions. It’s a must –  you need to nvestigate what is going on with other keywords and extensions to see if it might be worth your time and investment. Example: if you’re interested in purchasing a .co domain name, see how popular it is with a .net or .com extension to see what traffic it’s driving.
• To Buy or Not to Buy? Ultimately, choose a vertical or find domains you are interested in so you know facts and figures well. Also look at CPC (cost-per-click) trends and other domain sales numbers in your industry over the past year, and also trust your gut.
• There is a Strong International Buying Market. Kathy Nielsen of Sedo shared trending information: .de and .eu are some of the most popular ones to invest in.
• Diversify Your Portfolio. Like investing in stocks, it’s good to diversify your holdings. You can still register many good .co domains, and the buying market for .tv is also doing well (according to Sedo).
• Domain Brokerage Services: Good for Higher Priced Names. Constant feedback, goal to generate lots of interest among many parties bidding in name.
• Domain Investing Newbies Who are Looking to Get Started:Look at Name drops. Some registrars drop into certain places (example – some drop with snapnames.com so you’ll want to check there), others drop at certain times. If you want more guidance, work with an adviser or broker who can walk you through the process of name drops.
• Popular Categories for Buying and Selling Domains are in Health, Fitness, Finance and Gaming. Look at google traffic and SEO rankings.
• Heavily Consider the Brand Value of TLDs. Also, heavily consider the content (if it is built out) as this will impact the long term value.

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SnapNames was recently awarded patent #7,742,160, as brought to light at Domain Name Wire. The primary points of the patent cover the ability to capture domain names dropped for non-renewal, ‘tagging’ names and acquisition monitoring services.

Primary competitors in the dropped names capturing mechanism include NameJet and Pool, both of which could be in violation. The tagging process is quite interesting as well. Tagging names is their method of quantifying interest of a name. It would appear that you could lose your “next in line” status if they decided to send a higher-ranked domain to auction.

Of particular note is their description of domain monitoring services. Their stated claims in the invention ostensibly constrain the monitoring services to apply only to monitoring and valuing expiring domains. However, their description of the monitoring service states, among other examples, that a monitoring service could be used to “track competitor’s movements” and have “multiple subscribers per domain”. The monitoring services could be “offered independently from … the acquisition services”. Those statements may broaden the application of the patent beyond simple acquisition services and could directly affect monitoring services currently offered by many companies in the industry.

Not only does the patent give the lawyers at Oversee.net, SnapNames’ parent company, something to do, but it could affect the marketplace and healthy competition. If SnapNames pursues this patent and requires competition to license the technology, they could become the only contender in the dropped names aftermarket and monitoring services – a huge advantage for them, but it may prove unhealthy for the market. Or, it could be good… ? Healthy competition can spur innovation.

So while this may be a boon for SnapNames and Oversee, it’s an even better win for their lawyers, depending on how the patent is interpreted, as they weed through potential violators.

Oversee.net announced today that they have acquired Moniker but the terms of the transaction were not disclosed, however it was believed to be around $26 Million dollar transaction. Monte Cahn has agreed to a multi-year commitment with Oversee by continuing to run Moniker.

Oversee also acquired SnapNames in May of 2007 for around $35 Million. Oversee will leverage the two divisions’ capabilities by adding Moniker’s live auction and back-office services to SnapNames Live.

The first demonstration of the integration will be at DOMAINfest Global later this month, where SnapNames Live will lead and conduct the auction, with Moniker providing valuation and escrow services. More integrated services are planned, including:

• Deepening Moniker’s continuing commitment to its auction partners through the use of the SnapNames Live technology in Moniker-managed auctions
• The addition of DomainSponsor as an available option in Moniker’s TrafficClub monetization service
• Availability of Moniker’s registrar services for SnapNames and DomainSponsor customers
• Inclusion of traffic and monetization history as data for domain name auctions
• A complete set of Domain Asset Management services that offer domain owners all the tools necessary to profitably manage their domains

Commenting on the transaction, Moniker CEO Cahn said, “Oversee’s advanced technology platform and strong financial resources give us the capability to focus on further expanding our market opportunity. This is a dynamic industry, and our collaboration with SnapNames puts Oversee well ahead of any competitor. This is a tremendous opportunity for Oversee and Moniker.”

“We are delighted that Monte Cahn and his team of experienced professionals are becoming part of the Oversee family, Our primary objective, as a company, is to continue adding and developing capabilities that offer customers a greater breadth of products and services. Moniker is widely respected by industry players and has a reputation for knowledge, security, and professionalism.” said Lawrence Ng, Chief Executive Officer and Co-Founder of Oversee.

Personally I am glad to hear that SnapNames will be including traffic and monetization history into their auction service. This is a move in the right direction and DomainTools is also seeking expand on what we already do in the Auction space by providing this data. We will work with all leading parking companies to make the history and stats available when domains are being purchased at auction. I am working on an open standard for sharing this information along with secure authorization procedures for access to that data. I believe the next evolution for our industry will be more visibility into the domain history and monetization performance.

I saw this interesting Google Ad today. I saw the ad inside my gmail account, but the weird thing is that this ad was for a PPC page. The ad was for the domain name “V V hite House.com”, which looks like whitehouse.com. Is this an Ad designed to arbitrage Google traffic, or is the domain really being sold or leased? The ad took me to a PPC page over at Oversee with no ability to buy the domain or lease it. The only thing on the landing page was a bunch of PPC ads. Perhaps this ad is being shown on PPC pages as well, which would really complete the circle. When a parking page is being advertised, you know something odd is going on. I honestly thought the domain was being sold but it turned out to be an ad for a parking page.

Upon a deeper check I took a look at the whois record for vvhitehouse.com and it appears to be owned by Domainamania.com LLC, which is a snapnames company, which is an Oversee company, which is the company that actually parks the domain. The domain whois record said it was listed for sale at Sedo for $2500. So I visited the Sedo for sale page for the domain and it had this description:

The ClickAlike.com portfolio includes look-alikes for many of the highest priced generic domains ever sold, including some of this years top-selling domains. ClickAlikes are a whole new breed. Clickalikes can be a thrifty and clever fiat to enable otherwise unattainable marketability. Because ClickAlikes convey the same meaning as the actual generic domain, (for example, www.incorporation.com can be represented as www.lncorporation.com), they can be an extremely important asset in driving web traffic.

Which means Click-A-Like domains cost $6.42 to register and can be sold for $2500. That is a nice profit. I wonder if anyone is buying them? If so, I can see a bunch of domainers going out and registering these types of domains. I went over to the domain being advertised (ClickaLike.com) in the Sedo description and it was a parking page. Go figure.

UPDATE: My deeper check that showed the domain was for sale on Sedo was half correct. The previous owner had listed it for sale on Sedo and it is still listed. Sedo has no automated mechanism of removing the old listings, so there may be a lot of old listings that are not truly for sale. Snapnames and Oversee are not associated with ClickALike.com. That description must have been the previous owner. Snapnames registered the domain for $6.20 this summer on a drop. Snapnames claims no ownership of the Google Ad. So it appears on the surface that the old owner (JB of WirelessGarden.com) is still running advertising to sell or lease his old domain which he failed to renew in April of this year. Wow. You see something new everyday.

This is not good news for Oversee.net. Oversee.net just purchased Snapnames for $35 Million and it looks like their investment is going to go south very quickly. Network Solutions has filed for a trademark on NameJet, a service that will feature that same services Network Solutions current partner Snapnames is providing. For the guys that cashed out of Snapnames they had perfect timing or perhaps they awoke the sleeping whale by not offering the company to them. Network Solutions may have been angry they were not consulted or offered the Snapnames sale. Since most of the value of Snapnames is locked up around Network Solutions expiring domains it will be interesting to see this play out.

The domain name NameJet.com was purchased off of Afternic a while ago and it stands to reason that purchase was by the first registrar, the almighty Network Solutions. While the domain is currently at eNom the chance that eNom is involved in the new service seems remote. I talked with a high level source at eNom and they had no idea what NameJet was. I would expect Network Solutions to make an announcement soon that all expiring domains inside Network Solutions will no longer Transfer-Fulfill through Snapnames.

Snapnames has a patent pending on what they do with Network Solutions, so I wonder if that will stop Network Solutions or if Network Solutions will fight the patent before it is finalized.

Word Mark	NAMEJET
Goods and Services	IC 042. US 100 101. G & S: On-line auction services; on-line auction services featuring domain names; on-line auction services for businesses, consumers, domain name holders; domain name registration and sales services; on-line bidding services featuring domain names; domain name backorder request services; on-line proxy bidding services
Standard Characters Claimed
Mark Drawing Code	(4) STANDARD CHARACTER MARK
Serial Number	77287213
Filing Date	September 24, 2007
Current Filing Basis	1B
Original Filing Basis	1B
Owner	(APPLICANT) Network Solutions, LLC LTD LIAB CO DELAWARE Suite 300 13861 Sunrise Valley Drive Herndon VIRGINIA 20171
Attorney of Record	Brian J. Winterfeldt
Type of Mark	SERVICE MARK
Register	PRINCIPAL
Live/Dead Indicator	LIVE

This was first spotted by trademark watcher TradeMork.

Sevan Derderian joins HitFarm today. This is a huge announcement because Sevan was famous for being the best sales person at DomainSponsor. Of the several Parking companies in the industry, DomainSponsor is the most well known because they sponsor so much and send teams of people to any event that has domainers. Sevan knows how to bring in customers and keep them happy. As a senior sales person he did such a good job that he kept meeting all his objectives and always earned his maximum bonus. Sevan and DomainSponsor went different ways because Sevan was too successful and kept hitting ceilings. He was given higher and higher goals and always met them. This sounds like a problem I would love to have as an employer.

Sales people work on commission and work their asses off and keep hustling all the time. You tell a sales person, go find $10 dollars and we will give you $1 dollar. This formula should scale for a long time. The worst thing you can tell a sales person is, you have met your goals, now do the rest for free. They tend to store those new leads for the next quarter or sit on their hands. I met Sevan last night and he was unemployeed and looking for a new company to join. Within an hour he came back over and told me the good news, HitFarm made him an offer and the two are now married. Congratulation Sevan, something tells me he will be the top preforming Sales Person at HitFarm within a few months.

HitFarm is part of the Reinvent company that Kevin Ham and Colin Yu own. Reinvent was made famous when Kevin was featured on the June Cover of Business 2.0. Good hiring decisions like this will keep Kevin on track to own the Internet.

As we reported yesterday, Snapnames sold to Oversee.net. Today they send a note to their customers let them know. Oversee announced earlier this year that they have been granted a $60 million dollar line of Credit from Bank of America. So it sounds like some of that line of Credit was used to make the purchase of Snapnames. We suspect the price they paid was around $50 Million. A few bidders on the company confirmed that $25 Million was not the price and they knew it was much higher. Snapnames has a sister company called Oregon Names which collects and monetizes domain names so we suspect that sister company was sold as part of the deal but we have no confirmation yet.

This is the letter which was sent to Snapnames customers:

To SnapNames Customers:

I’m writing to inform you that SnapNames has agreed to be acquired by Oversee.net. Oversee, a company already familiar to many in the domain name industry, is a technology-driven online marketing solutions company that offers an impressive array of services to domain name owners. You can learn more about the company at www.oversee.net.

It’s important that you understand there will be no changes to the way SnapNames provides its services. This is a combination of two industry leaders with outstanding reputations for serving domain name investors and customers at all levels.

We were attracted to Oversee for many reasons, including the opportunity to offer SnapNames customers a greater breadth of service offerings. Together, the two companies can provide services that support our customers’ needs throughout the entire life cycle of a domain name, including procurement, monetization and sales.

This transaction is expected to close in mid-June. There is more information available on our Web site at www.snapnames.com. Of course, we’re always available to assist you in any way we can, and encourage your questions and comments. Our support team is available to you here:

On the Web: http://snapnames.custhelp.com
By e-mail: support@snapnames.com

At SnapNames, you will continue to find the world’s largest selection of expired domain names. You’ll find no changes to your account or the way you do business with us. We value you as a customer and thank you for your continued business.

Sincerely,

Sudhir Bhagwan
Chief Executive Officer

A few customers have feared that Oversee would have a conflict of Interest in running auctions at Snapnames. The theory is they pull good domains out of the auction and keep them for themselves. The registrars that gives Snapnames the domains will make sure that does not happen, so that should not be a fear. We can safely safe that will not happen.

You heard it here first. The Industry leader in Auctions has been bought by Oversee.net. You may know Oversee.net better as DomainSponsor.com. DomainSponsor is a leader in Domain Monetization. We are not sure if OregonNames was sold as well but it would seem likely.

Snapnames has been for sale for a long time and but it came down to two bidders. Oversee turned out to be the biggest bidder.

Snapnames said nothing would change after the sale, it is business as usual and operations would continue as normal.

More details on this break news as it happens.

Update: Frank Schilling covered this just after us. He is reporting the sale is 25 Million. We are hearing it is much higher. Possible around 35 Million.

Last week was an interesting week for Domain Auctions. BuyUSA.com topped the charts and the typo of Facebook fetched $15,000. I wonder how long it will take Facebook to discover their typo is on the loose. Some long names sold like Breast Cancer Support Group and Thoroughbred Race Horses. It goes to show that even four word domain names fetch good prices when they totally define a huge category. CamelTeo was an interesting sale, apparently a lot of people spell toe, T E O. Frank Schilling reported publicly that he snores and that he also bought SnoringCure.com. It takes a big man to admit he snores.

Why else pay 140X for a name like snoringcure.com ($8,000+ at Snapnames.com today). It will be a frosty day in Hell when PPC revenues pay for that one, but I now own a great snoring name! I can sell products relating to the malady .. some of them may cure my snoring (much to my wife’s relief). It is generic, descriptive, easy to buy traffic for, easy to arbitrage – I could probably live off that one name! Man you gotta love domains.

We have asked other auction services to send us their Auction data. So far only Snapnames has sent us their data but we will report all sales data when receive them.

Domain	Price	Source
Buy USA.com	$27,777	Snapnames
DSL Start.com	$18,662	Snapnames
www Facebook.com	$15,722	Snapnames
V-Chip.org	$10,750	Snapnames
Snoring Cure.com	$8,002	Snapnames
Catalunya.net	$6,610	Snapnames
Personal-Loan.com	$5,733	Snapnames
MotorCycleVideos.com	$5,300	Snapnames
Ambi.com	$4,667	Snapnames
Aquaduct.com	$4,655	Snapnames
Car Insurance.biz	$3,801	Snapnames
Summit Design.com	$3,800	Snapnames
Straight Razors.com	$3,622	Snapnames
Thoroughbred Race Horses.com	$3,566	Snapnames
Breast Cancer Support Group.com	$3,556	Snapnames
Smart GPS.com	$3,500	Snapnames
World Domain.com	$3,400	Snapnames
Bunny Slippers.com	$3,150	Snapnames
Large Prints.com	$3,121	Snapnames
Preferred Traveler.com	$2,877	Snapnames
Bees Wax Candle.com	$2,667	Snapnames
Tactical Shop.com	$2,300	Snapnames
Camel Teo.com	$2,150	Snapnames
Electric Mobility Scooter.com	$2,115	Snapnames
Ultra Care.com	$2,050	Snapnames
World Park.com	$2,001	Snapnames
Cool Biz Ideas.com	$2,000	Snapnames